Whether you are evaluating the need for warehouse automation or already have it in place, understanding how SAP Warehouse Management (SAP WM) can integrate with automation will help you take full advantage of your investment in automation and SAP WM’s capabilities.

I’ll cover the different roles SAP WM and warehouse automation play in a typical distribution environment. I’ll present some benefits you can achieve through a robust interface design and guide you through a recent case study of a successful SAP WM implementation with a large scale mezzanine conveyor storage/sortation system. Then, I’ll present some key considerations and pitfalls to watch for when integrating SAP WM with automation.

SAP WM’s Role in Warehouse Automation

Figure 1 shows the high-level roles SAP WM plays with a few common types of warehouse automation. Regardless of the amount of automation, the role of SAP WM should remain the same. SAP WM should function as the central nervous system of the warehouse. It contains the core business processing logic that coordinates all the various distribution activities to enable an efficient operation. SAP WM should also function as the inventory system of record while serving as the clearinghouse for all transactions that affect inventory.

Figure 1

Roles SAP WM plays with different types of warehouse automation

With SAP WM as the backbone processing engine, warehouse automation should be viewed as a valuable and specialized extension for task execution. Warehouse automation vendors often bundle warehouse management system-type capabilities with their solutions. However, some of these capabilities overlap with SAP WM. It is therefore important to clearly define the different roles and functions that SAP WM and automation should play before the detailed design takes place. Regardless of the SAP WM application (i.e., traditional WM, ERP Central Component [ECC] Extended Warehouse Management [EWM], or SCM EWM) or the version you are running, the high-level roles SAP WM plays with warehouse automation should remain the same.

Integrating Warehouse Automation with SAP WM

In the past, warehouse automation was often viewed simply as the machinery required to move goods from point A to point B, or to perform some type of specific physical function. Often there was no link from the upper-level control system, such as a warehouse management system, to the warehouse automation’s sub-system. If interfaces were in place, they tended to be overly simplistic and, most likely, unreliable. As companies continue to look to their supply chains for ways to gain competitive advantage, they recognize the value in fully integrating their warehouse automation with their warehouse management system. By doing so, they enable a data-rich exchange of information that greatly improves visibility at a detailed level and provides for a more seamless and reliable operation.

Integration between SAP WM and warehouse automation aids how work is prioritized and performed in the warehouse. For example, when order pickers fulfill orders through the assistance of a pick-to-belt mezzanine sortation system, a delivery’s priority in SAP can determine both the picking sequence, as managed by SAP WM, as well as the priority within the sortation system. The sortation system can route products for high priority deliveries first, thereby reducing fulfillment cycle time. Traditionally, sortation systems maintained shipping priorities based on static routes or dock doors. These priorities were only maintained within the sortation system and rarely changed.

SAP WM can maintain full visibility throughout the process including real-time inventory tracking at the bin level. Whether SAP WM is interfacing to an automatic storage and retrieval system (AS/RS), a carousel, or a pick-to- light system, it can continue to monitor and track inventory as it is put away, replenished, and picked via warehouse automation. Also, by maintaining bin-level tracking, SAP WM can continue to provide detailed traceability of batch characteristics, expiration dates, quality status, and vendor attributes throughout the process.

A Case Study

Figure 2 shows the high-level process flow of a recent and successful implementation of SAP WM with a large-scale pick-to-belt sortation system within the packaged food distribution industry. The implementation involved a multi-level mezzanine with pallet flow racking, an outbound power conveyor with a high-speed in-line scanner, and automatic shipping lane diverts. The basic process involves hand-thrown case picks from pallet flow bins to an outbound conveyor using radio frequency (RF) scanners. Picked cases then pass the in-line scanner to be routed to the appropriate shipping lane. Once cases are queued at the shipping lanes, they are floor stacked on trailers in delivery sequence.

Figure 2

How SAP WM can integrate with a conveyor sortation system

The five steps I present in the figure and discuss below both guide you through the physical process and information flow and highlight some best practices to keep in mind when integrating SAP WM with warehouse automation.

Step 1. Create transfer order using the Outbound Delivery Monitor. Using the Outbound Delivery Monitor in SAP WM (transaction code VL06o), end users review the deliveries that need to be shipped for the day. Based on scheduled ship times, users select one or more deliveries for fulfillment. SAP WM then automatically creates transfer orders for the selected deliveries.

As part of the transfer order creation process, the system selects the specific product batch to be picked based on remaining shelf life. When selected, a systematic control is built into the process to ensure proper stock rotation. When there are multiple bins with the same product batch, SAP WM selects the appropriate source bin based on travel path optimization.

Also during transfer order creation, a preconfigured custom output type triggers the generation of an interface file. The interface file contains the key delivery data elements the sortation system uses to route product to the correct shipping lane in the correct sequence. Some of the key interface data elements are material, batch, delivery, priority, dock door, and customer.

After the interface file generates and is deposited in a shared directory, middleware takes over and manages the timely transmission of the data file to the sortation system. The middleware and supporting data exchange programs all use time-stamp logic to ensure proper data processing sequencing. When the transfer order information has made it to the sortation system, the sortation system waits for the picked cases to pass the in-line scanner. Figure 3 shows the fulfillment process initiated by the Outbound Delivery Monitor (transaction code VL06o).

Figure 3

Outbound Delivery Monitor

It is important to note that having a clear understanding of the required data transmission speeds is essential early in the design process. The required transmission speed should be based on the fastest physical scenario possible. For example, assume no picking queue time and the shortest possible conveyance distance.

Step 2. Perform case picking. After the Outbound Delivery Monitor releases transfer orders for picking, pickers use SAP WM RF transactions to perform case picks. Picking accuracy is confirmed through RF scan confirmations of product ID and batch barcodes that are preprinted on each case from manufacturing. After the picks are performed, the system automatically updates the transfer orders with an interim status in SAP WM. After the cases for a delivery have passed the in-line scanner and have successfully been diverted, the system then updates the final transfer order confirmation status from the sortation system.

Step 3. Carry out in-line sortation. As cases pass the sortation system’s high- speed in-line scanner, barcodes containing the product ID and batch number are captured. The sortation system then routes the product to the correct shipping lane based on the previously downloaded ship-to information from SAP WM. The sortation system includes additional logic that routes product for higher priority deliveries first. In the event of a shortage, the sortation system uses round-robin logic to evenly distribute product across deliveries of equal priority.

Step 4. Confirm transfer order. After successfully diverting all products for a delivery, the sortation system automatically generates a confirmation file to update SAP WM. The middleware layer accepts and converts the confirmation file into an IDoc format that SAP WM can accept. SAP WM then processes the IDocs and updates the transfer orders with a confirmation status. Figure 4 displays the queue of outbound deliveries in SAP WM that are waiting to be confirmed by the sortation system.

Figure 4

Outbound deliveries to be confirmed by the sortation system

Step 5. Post goods issue with shipping documentation. When all transfer orders for a delivery have been confirmed, the Outbound Delivery Monitor notifies the shipping clerk to print the shipping documentation and to perform the post goods issue. After the documentation is generated and the post goods issue is performed, SAP WM relieves inventory and places it into an in-transit status. Figure 5 displays the queue of outbound deliveries ready for post goods issue.

Figure 5

Outbound deliveries ready for post goods issue

Error Processing

Whenever integrating warehouse automation to an upper-level control system such as SAP WM, you need to incorporate robust error processing into the design in addition to recovery and contingency plans. Because warehousing systems deal in the physical world, exceptions occur. Here are some successful error processing features that were incorporated in the case study:

Ensure interface files can be manually regenerated. There must be a method available for the sortation system to regenerate interface files and for the interfaces to direct the regenerated file to a location other than the default directory (i.e., a different drive location, a CD drive, or USB memory stick). This allows manual transporting of files in the event of a connectivity failure, failed processing, or corrupted files. This capability also comes in handy during the testing phase. You can easily pass data files from the sortation system’s test environment to SAP WM without having the middleware layer set up. (Typically you do not configure the middleware layer until well into system testing to avoid having to reconfigure it after changes have been made based on testing.)

Automatic exception notification. Consider building in automatic e-mail notification to notify support staff when there is an issue generating and processing interface files. You can set up automatic notification that monitors SAP WM, the middleware layer, and the automation’s sub-system to ensure the whole interface process is being monitored.

Leverage SAP WM’s standard error processing capabilities. You can fully leverage SAP’s standard IDoc processing and reprocessing capabilities in the event of IDoc failures. In general, SAP’s IDoc monitoring functionality provides a great way to monitor the health of the interface data transmissions with the automation sub-system. Figure 6 displays the standard IDoc queue of outbound deliveries ready for post goods issue.

Figure 6

Standard IDoc processing

Special Considerations

Besides the normal challenges of implementing new warehouse processes and technology, project teams can face some unique challenges when integrating warehouse automation with SAP WM. These are batch management traceability, interface timing, change management, and testing. Let’s look into each of these in detail.

Batch management traceability. Increasingly, companies are feeling the pressure to track in detail the specific manufacturing batches that flow through their supply chains. A good example of this is in the processed food industry where production batch information often needs to be traced all the way to the end customer in the event of a recall.

As part of the design process it is important to evaluate the pros and cons related to detailed batch traceability. As a general rule, the more detailed the traceability requirements the more disciplined the end-user process will need to be and the more robust the warehouse automation integration design will need to be. For example, if strict first-in-first-out is a requirement, you need to configure the system to automatically select specific batches based on remaining shelf-life when transfer orders are created. This requires pickers to only pick the specified batch, thereby limiting the possible bin locations for picking. From a warehouse automation perspective, detailed batch traceability means that the automation’s sub-system needs to track and confirm that specific batches are successfully fulfilled for a specific customer delivery. This is a more granular requirement than just ensuring the correct product is fulfilled.

Interface Timing. During the design process it is important to understand the physical timing requirements related to data transmissions between SAP WM and the automation sub-system as it relates to the physical goods movement in the warehouse. The fastest possible physical scenario should be used as the baseline. For example, when integrating warehouse automation with powered conveyor, the shortest possible conveyance distance should be used when determining travel time, not the average travel distance. Also, set up the interface data file processing jobs in quick intervals so that a data file has time to automatically reprocess in the event of a transmission issue.

When the technical and physical timing requirements are well understood, be sure to look for ways to validate the timing during your testing program. This isn’t always easy to do since testing takes place in a lab environment. Look for creative ways, such as using off shifts, to administer tests using the actual automation equipment.

Understand change management requirements. When companies integrate SAP WM with warehouse automation, it is easy to overlook the change management component of the project. However, understanding the impacts the project will have on end users and warehouse supervisory staff is important to the project’s success.

Establish a structured training program that informs users about the new terminology, the purpose of the project, and how SAP WM and the warehouse automation work together. If the end users are being retrained from a prior warehouse management system or warehouse automation sub-system, incorporate ways to translate the prior system’s terminology into the new system and process terminology. It is also important to explain in business terms why the new system makes the end users’ lives better. By keeping the end-user perspective in mind when developing the training program, you are less likely to have issues obtaining end-user support later in the project.

Ensure a robust testing program. Each stage of an implementation project from requirements definition, design, build, and system testing to startup, are critical and equally important. However, system testing is where everything comes together into the end-state solution. Rigorous system testing is the key to reducing risk while helping to ensure success.

The first step to system testing is to develop a thorough test plan that identifies project resources, timelines, and testing phases. A good test plan includes multiple test phases that build on one another. For example, a test plan can include point-to-point testing, integration testing, volume testing, and business readiness testing. Adequate time and resources need to be dedicated to each phase and should be detailed in the project plan.

There is no doubt that system testing can be a grueling process that is often monotonous and frustrating for a project team. However, try to avoid becoming discouraged when problems are uncovered, and focus on getting quick resolutions. Remember that every resolved problem brings you one step closer to a complete solution. If your team has a good test plan in place and prepares and conducts each test phase faithfully, all the hard work will reap the rewards with a smooth go-live.